Natural gas

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Natural gas is a traditional energy resource, which is a resource that is nonrenewable. It is a combustible mixture of gaseous hydrocarbons, the primarily compound being methane, a naturally occurring colorless, odorless, nontoxic, and flammable gas. Natural gas accumulates in sedimentary rocks beneath the surface of the earth. These layers of rock trap the natural gas as it attempts to float to the surface, and the natural gas molecules become trapped in holes and cracks throughout rock formations.

Natural gas is used to generate electricity, heat buildings, fuel vehicles, heat water, and power furnaces in industrial facilities. Nearly 50 percent of U.S. homes use natural gas, mostly for space and water heating, as well as for appliances like ovens, stoves, and lighting fixtures. Additionally, chemicals derived from natural gas, such as hydrocarbon gas liquids, are used to produce plastics, pharmaceuticals, and other products.

Background

The U.S. Energy Information Administration (EIA) has predicted that greater natural gas production in the United States will benefit industrial and manufacturing sectors as well as consumers in the form of lower energy prices, more jobs, and more personal income for U.S. households from 2014 to 2030.

Proponents of natural gas production and consumption argue that it is an abundant domestic natural resource that provides reliable energy and is an important feedstock for many useful products. Some argue the fuel should be a "bridge fuel," leading the United States into a new energy economy that does not employ conventional, carbon dioxide-emitting fuels. Other proponents argue further that natural gas should be used more because it produces fewer carbon dioxide emissions than other traditional energy resources.

Opponents of natural gas production and consumption argue that the methane emissions produced by natural gas have more of a greenhouse effect than carbon dioxide and therefore allegedly has more of an effect on potentially human-caused global warming and climate change. Opponents also argue that an increasing reliance on natural gas will only extend the use of fossil fuels, instead of increasing the use of renewable energy. Others also oppose the production and use of natural gas because they support keeping all fossil fuels unused for the purpose of ending all fossil fuel use and fear hydraulic fracturing, which is the primary method of natural gas extraction in the United States, as dangerous and harmful to the environment.

Transportation

The map above shows interstate and intrastate pipelines in the United States.

Transporting natural gas from a wellhead to consumers involves multiple steps. A natural gas pipeline system transports natural gas from the producing field or well. As the gas leaves the well, a pipeline gathering system directs the gas either to a processing plant or directly to the mainline transmission grid, which includes the interstate system of transmission pipelines and intrastate transmission pipelines within state boundaries. Pumping stations along the pipeline network keep the natural gas flowing through the pipeline system. A processing plant produces natural gas that can be transferred through a pipeline. The gas then travels by pipeline to consumers or is placed in an underground storage unit for future use. Storing natural gas helps maintain the pipeline system's stability and/or to meet consumer demand during peak-usage periods.

The following physical facilities play a part in transporting natural gas:

• Gathering lines: These are smaller pipelines that move natural gas from a wellhead to the processing plant or to the system connecting to larger pipelines.
• Processing plant: These plants extract natural gas liquids and impurities from natural gas.
• Mainline transmission systems: These are wider, long-distance pipelines that transport natural gas from producing wells to market hubs.
• Market hub (or market center): These are areas where pipelines intersect and natural gas flows are transferred between pipelines.
• Underground storage facility: These facilities store natural gas in depleted oil and gas reservoirs, aquifers, and caverns for future use.

Ralph Northam on Virginia pipelines
August 29, 2017: Northam faced criticism for not opposing construction of natural gas pipelines in Virginia. Referring to the proposed Atlantic Coast Pipeline during a 2017 gubernatorial debate, Northam said, "At the end of the day...FERC will make that final decision."
Is he correct? Read Ballotpedia's fact check »

Use of natural gas

Total U.S. natural gas production between January 2010 and July 2014 is shown above. The data was collected by the U.S. Energy Information Administration.

Natural gas is used to generate electricity, heat buildings, fuel vehicles, heat water, and power furnaces in industrial facilities. Nearly 50 percent of U.S. homes use natural gas, mostly for space and water heating, as well as appliances like ovens, stoves, and lighting fixtures. Other sources of natural gas consumption include the following:

• Commercial buildings for space heating, water heating or air conditioning. These buildings use 14 percent of the natural gas consumed in the United States.
• The electric power industry, the largest natural gas consumer in the United States, consumed roughly 34 percent of natural gas for generating electricity.
• Nearly 31 percent of natural gas consumption in the United States was by industries, which use it as a raw material and as a heating source. The products manufactured from natural gas include fertilizer, plastics, pharmaceuticals, and fabrics.

Electricity generation

Natural gas power plants generate electricity in gas turbines using the exhaust gases produced by natural gas combustion. A single-cycle gas turbine converts the heat energy from natural gas combustion into electricity. Many new natural gas power plants, however, are combined-cycle natural gas plants. These plants have both a gas turbine and a steam unit. The gas turbines use the hot gases from natural gas combustion to power a turbine and generate electricity. The heat from the gas turbine process is used to generate steam, which is used to generate electricity. Combined-cycle plants are more efficient than plants with only a steam unit or a gas turbine.

Reserves

The United States had proven natural gas reserves of 354 trillion cubic feet (TCF) in 2013, according to the EIA. This represented a 10 percent increase compared to 2012 proven natural gas reserves. This change in proven reserves was driven by geological and economical factors. First, new natural gas fields were discovered. Additionally, natural gas prices fell to recent historic lows primarily due to fracking, which has made it possible to access new natural gas resources at a more affordable cost. Due to the lower cost of natural gas and the construction of more natural gas power plants, energy-related carbon dioxide emissions in 2016 reached their lowest level since 1991 and natural gas-powered electricity is expected to surpass coal in 2016 for the first time.

The map to the right shows the changes from 2012 to 2013 in proven natural gas for each state in the United States. Pennsylvania and West Virginia had the largest increase in proven natural gas reserves in 2013. Alaska, meanwhile, had the greatest decline, 2.284 billion cubic feet.

In June 2016, the U.S. Geological Survey found that the Piceance Basin of Colorado contains an estimated average of 66 trillion cubic feet of shale natural gas and 45 million barrels of natural gas liquids. These resources were previously undiscovered and are "technically recoverable." The previous estimate in 2003 found that the region contained an estimated 1.6 trillion cubic feet of shale natural gas.

Production

Total U.S. production of natural gas in 2015 was 27.06 trillion cubic feet (Tcf). The table below shows the top five natural gas-producing states in 2015.

Top 5 states for natural gas production (2015)
State	Total production (trillion cubic feet)	Percentage of U.S. total production
Texas	7.07	26 percent
Pennsylvania	4.76	18 percent
Oklahoma	2.34	9 percent
Wyoming	1.75	6 percent
Louisiana	1.74	6 percent
Source: U.S. Energy Information Administration, "Which states consume and produce the most natural gas?" November 23, 2016

Consumption

Total U.S. consumption of natural gas in 2015 was 27.31 trillion cubic feet (Tcf). The table below shows the top five natural gas-consuming states in 2015.

Top 5 states for natural gas consumption (2015)
State	Total consumption (trillion cubic feet)	Percentage of total U.S. consumption (trillion cubic feet)
Texas	4.14	15 percent
California	2.31	8 percent
Louisiana	1.47	5 percent
New York	1.36	5 percent
Florida	1.34	5 percent
Source: U.S. Energy Information Administration, "Which states consume and produce the most natural gas?" November 23, 2016

Issues

Fracking

Aerial view of an hydraulic fracturing site (click to enlarge)

Fracking has become important to the natural gas extraction process because it allows drillers access gas resources that were previously either unreachable or economically infeasible to extract. A significant increase in natural gas production in the United States since 2000 is primarily due to fracking. In 2000, around 26,000 fracked wells produced roughly 3.6 billion cubic feet of marketed gas per day, which accounted for less than 7 percent of total U.S. production. By 2015, the United States had around 300,000 fracked wells and production reached 53 billion cubic feet of marketed gas per day. Since 2006, fracking has become the way by which most natural gas is produced in the United States—hydraulically fracked wells accounted for approximately 67 percent of total U.S. marketed gas production in 2015, a share of production greater than the share of crude oil produced through fracking. Natural gas production from fracking has come mainly from shale and other rocks in the Utica and Marcellus formations of the Appalachian Basin, the Permian Basin formations in Texas and New Mexico, the Bakken formation in Montana and North Dakota, and the Eagle Ford formation in Texas.

Proponents of fracking have argued that the environmental benefit of directional drilling in fracking is the ability of drillers to access energy resources in sensitive areas without having to set up equipment within those areas. Instead of drilling multiple vertical wells, drillers can drill one horizontal well that provides access to a mile of oil or gas deposits, reducing the drilling's impact on the land. Proponents further argue that fracking is effectively regulated by the states and provides multiple economic benefits, including cheaper natural gas and thus more affordable energy prices for consumers as well as more jobs in the energy sector.

Opponents of fracking have argued that the potential negative environmental and human health impacts could be significant. These risks include air pollution, earthquakes, water impacts, and the alleged impact on global warming by increased natural gas use. Although wells have been fracked for over 65 years in the United States, concerns have been raised about whether federal, state, and local regulatory agencies can keep up with the rapid increase in fracking activity and adequately protect the environment and human health. Fracking opponents argue the practice should be regulated much more heavily or banned outright.

Exports

The Cove Point LNG Terminal is an offshore liquid natural gas shipping terminal located in Maryland (click to enlarge).

Increased natural gas production in the United States has led to a debate over natural gas exports, particularly liquefied natural gas (LNG) exports. Natural gas companies can liquefy gas at a plant, which produces LNG that can be shipped from an export station and transferred to an import terminal that converts the LNG back into gas form. This gas then can be stored or sent to a pipeline.

An increasing supply of natural gas associated with fracking has led to historically low prices in the United States. As a result, U.S. gas producers have supported exporting more natural gas in order to make future production more economically viable. The debate has focused on whether greater exports will benefit producers by opening up foreign markets and thus increasing production and jobs while keeping prices low or whether greater exports will lead to higher energy prices for U.S. consumers as domestic supplies decrease and U.S. gas prices rise to match higher foreign prices.

Proponents of greater exports, including gas producers, have argued that historically low U.S. natural gas prices are too low to justify further gas development; producers have proposed exporting U.S. gas to foreign markets where prices are significantly higher. These proponents argue that greater U.S. exports to foreign markets will produce economic benefits that will outweigh the costs. These benefits include higher gross domestic product (GDP) and higher U.S. household income. Further, proponents argue that increasing exports will spur more U.S. production that will either offset any domestic price increase or keep prices low.

Opponents of greater exports, including domestic gas consumers such as chemical companies, have argued that exporting more natural gas would lead to higher U.S. prices, hurting U.S. businesses and consumers. These opponents argue that keeping U.S. gas prices historically low allow U.S. companies to pay less for natural gas than foreign competitors, which could increase profits and lead to more jobs in industries that benefit from lower gas prices. Further, opponents argue that exporting natural gas will increase domestic prices to foreign levels, which are generally much higher than U.S. prices.

Production on federal land

Total U.S. natural gas production has significantly increased since 2006. Though production on federal land fluctuated around 30 percent of total U.S. production from the 1980s to the early 2000s, production has steadily declined since. Production on federal land further declined each year from 2007 to 2015, mainly due to significantly declining offshore production, though onshore production on federal land has also declined since 2010.

The debate over natural gas production on federal lands has focused on whether more federal lands should be opened up for production.

Proponents have argued that proved reserves of natural gas on federal land should be extracted in order to lower prices further so that U.S. households and businesses save more and spend the savings in other areas of the economy. Some proponents argue that existing regulations on production should be streamlined to make the development process more efficient while other proponents argue that regulatory authority over production should be transferred to states.

Opponents have argued that greater production on existing or additional lands could result in some environmental risks, such as air pollution or land changes, without tighter federal regulation. These opponents argue that increasing lease fees could deter further production. Other opponents argue that no federal and state regulation will be adequate enough to ensure environmental and health protections and that federal lands should be managed primarily for conservation.

Major legislation

Major legislation regulating natural gas production goes as far back as the New Deal of the 1930s.

• The Natural Gas Act (1938) began federal regulation of natural gas. The law allowed the federal government to set rates that were charged by natural gas companies for their products. The law also prohibited new interstate natural gas pipelines from being built in areas already served by another gas pipeline.
• The Natural Gas Policy Act (1978) was passed in response to nationwide natural gas supply shortages. The law began the deregulation of natural gas markets. Primarily, the legislation removed price controls on natural gas and broke down hurdles on interstate and intrastate commerce in natural gas.
• The Natural Gas Wellhead Decontrol Act (1989) completed the deregulation of all natural gas wellhead prices nationwide, leaving the market to determine the price of natural gas.

See also

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  Coal

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  Crude oil

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  Fracking

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  Glossary of energy terms